Update on the Health Insurance Merger Trials

By Jill Zorn

wooden judge gavelThe Department of Justice filed law suits in July to stop the Anthem-Cigna and Aetna-Humana mergers and both trials are now underway in Washington, D.C.

Anthem-Cigna

The Anthem-Cigna trial started on November 21.

The first phase of the trial is focused on the “national accounts” market for large employers that have multiple work sites across the country.  The second phase of the trial will focus on 35 specific geographical insurance markets.

During the trial, documents showing tensions between the two merger partners were unsealed.  “At several points Anthem attempted to press on with the merger process unilaterally, without cooperation from Cigna. Adversarial notes were sent between the CEOs.”  As the Hartford Courant reports, “The deal, called ‘a shotgun marriage’ by one business professor, may be remembered more for this soap opera than for how it changed the health insurance industry.”

The presiding judge, Amy Berman Jackson, is expected to rule on the case by early next year.

Aetna-Humana

The Aetna-Humana trial began this week on December 5.

This case is focused on the market for Medicare Advantage, Medicare health plans that are sold by private insurers.  One of the key questions of the case is whether having a choice of “traditional Medicare” will provide enough competition and consumer choice, if there is one less competitor in the Medicare Advantage market.

The case is being heard by Judge John Bates.

Impact on Connecticut

Connecticut, along with nine other states and the District of Columbia, joined the Department of Justice suit against the Anthem-Cigna merger because the merger would “have a negative impact on both the availability of competitively priced healthcare and the quality of care in the state of Connecticut.”  According to Attorney General Jepsen’s statement, “this merger would eliminate significant competition, leaving employers and individual consumers vulnerable to increased costs and providers subject to decreased rates, with few, if any, options to find better alternatives.”

In addition, as we wrote in a previous blog, hundreds if not thousands of Connecticut jobs are threatened by both mergers.  With Anthem, headquartered in Indianapolis, being the acquiring company, Cigna jobs in Connecticut are certainly vulnerable. As this recent Hartford Courant article points out, “When it comes to which jobs are eliminated after mergers, buyers tend to keep more of their own workers.”

Ironically, this may not hold true for the Aetna-Humana merger.  Even though Aetna is acquiring Humana, they have already promised to not cut jobs in Kentucky, where Humana is based.  Meanwhile, as this CT Mirror article points out, no commitment has been made to keeping Aetna’s headquarters in Connecticut if the merger goes through.

What’s Next

Universal Health Care Foundation opposed both mergers, working in coalition with several other organizations in Connecticut and across the country.  We anxiously await the results of these two trials, and hope the verdict in each case will be a resounding “NO.”

If you want to dig in deeper on the merger trials, you may want to check out the blog of the Coalition to Protect Patient Choice.  The Hartford Courant and CT Mirror are also writing periodically about the trials.

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